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Striking a Balance

DW staff (kjb)
July 16, 2008

The European Union's plan to cut greenhouse gas emissions doesn't sufficiently take business needs into account, said Germany's economics ministry.

Power plant in Frimmersdorf
Industry can't do much more than it already has, said the economics ministryImage: AP

At a meeting of government and industry officials on Tuesday, July 15, Germany's Deputy Economics Minister Jochen Homann and all other speakers said that the EU plan was not business-friendly.

"The conclusion of the conference is that there is only limited scope for reducing "emissions" in the industrial sector and the EU climate package needs improvement in key areas," said the ministry in a statement.

The ministry was particularly critical of the EU's goal to cut the quota of emissions trading permits by 21 percent, compared to 2005 levels, saying this would cost Germany both jobs and growth. As a major burner of fossil-fuels, which cause unwanted CO2 emissions, Germany would be especially hard hit by the plan, added the ministry.

The statement also pointed out that an emissions trading program would result in a price hike for products that are useful in reaching climate goals, such as insulation glass and insulating construction materials.

No more room for cuts, says economics ministry

"Due to exploding oil and gas prices, further measures to achieve climate goals should be considered only with great caution," read the statement. "Rising energy prices are already a strong incentive to investment in renewable energies, energy savings and energy efficiency."

Germany's industry has already contributed extensively to reducing greenhouse gas emissions since 1990, despite economic growth, but has little leeway to do more, it added.

Earlier this month, the EU proposed a legally-binding bloc-wide initiative to slash energy consumption by 20 percent by the year 2020. EU environment ministers have suggested the use of biofuels as a way to cut carbon emissions by 35 percent in the short-term and by 50 percent by the year 2015.

EU legislators this month also approved an emissions trading plan for the aviation industry, which airlines say will drive up the price of flights.

But as long a key polluters like the United States, China and India don't implement similar strategies to reduce emissions, the EU's efforts won't have a significant impact on global climate change, concluded the economics ministry.